Bailed out Royal Bank of Scotland reported losses of £1.1bn for 2010 – but still plans to pay out bonuses of £950m to its bankers.

The contempt bankers have for society is evident in the comments made by Stephen Hester made. The Guardian reports:

He admitted that he was not able to hire staff as easily as he hoped because the bank has often become a "political football".

"Our ability to attract, retain and motivate the best people is still not what we want it to be. Our business challenges and the external environment lead to management compromises that add risk to the achievement of our business goals. We are working hard to move forward and balance staff motivation with external acceptance that past mistakes have been addressed," he said.

Motivation is not created by £950 million in bonuses?

The man is a fool. Let's not beat around the bush.

And this is, I admit, the consequence of Labour's failure. They did not nationalise this bank. They should have done. They instead put it in a company called UK Financial Investments - in turn owned by the Treasury, but they passed the entire management to bankers.

This was an act of outright folly at the time and it is increasingly apparent that it was now. The result is that these people hold us all to ransom.

When will we realise that we have to break banking to make progress? Break it into bits, break its power, break its abusive pay structures, break its ability to avoid tax, break its control of tax havens and break its right to create money out of nothing. Yes, I mean, we need to break banking.

9 Responses

According to Bloomberg the investment bank part of RBS made 3.5bn profit. I presume that most of the bonus payments will be made to the investment bank, and without the performance of the investment bank the loss overall would be much worse.

So whilst it is infuriating on the surface, it is perhaps necessary to ensure that the UK government eventually makes a return on the bail-out?

Stephen Hester is not a fool, he is smart and is getting away with the biggest lie possible. Those who keep calling him a fool are the fools.

Here is failed bank that owes it existence to the state saying it wants to pay top-pound to employees so they can retain the best. Well it simply cannot and should not be allowed to do so. They are a 4th Division Bank wanting to pay Premiership Wages, simply not on and not sustainable.

Until such time as the bank can afford it and have returned to the top flight, their salaries and bonuses should be distinctly third tier. Anyway, why would the best people want to work for such a disgrace of a business?

Your article suggests that Cameron wants to sell RBS however, having looked at the link and elsewhere I cannot find any suggestion that the bank is for sale…a stake might be available but not the bank.

Richard re taxing bads – what I find ridiculous is how the banks have been allowed to carry forward the losses they suffered in the banking crisis for releif against future taxes. Given that the banks (and I include those who received no direct state funding as well as those whioh did) were all spared the full impact of those losses as a result of tax payer funded action by the State – it appears a little rich that they should reduce their future tax burdens through carrying forward those losses. The introduction of such a measure would probably only have a limited impact on current bank capital since most of the tax losses have not been recognised as deferred tax assets.

I think if the ordinary man in the street understood how the banking crisis losses are now being used to reduce the bank’t tax burdens – and allow a consequnet increase in bonuses they would be appalled.

This is why there needs to be public debate on the concept of ‘liberalisation’ i.e. opening all investment opportunities to transnational investors, and whether we actually wants a political economy that runs on such a fundamental.